Stakeholder Views about the Operation of the Pilot Programme

Stakeholders in all five associations were interviewed at various stages in the course of the programme. Looking back, they all felt that involvement in the pilot was worthwhile and valuable. The experience of working together was universally seen as positive and each association was now better prepared for the main scheme:

Yeah absolutely, we’re really glad that we got involved. We’ve had a very, very positive experience¹²

The pilots were able to test the impact of the VRTB, enabling associations to develop management systems and processes, test estimates of future demand, and identify gaps in information and knowledge related to the eligibility of tenants and properties:

All of the little wrinkles and nuances we could never had found out without the pilot.

The most interesting aspect we keep coming back to […] is that we’ve kind of answered the questions that we had at the outset around affordability […] to be able to undertake a proper pilot and understand that has been fantastic.

Certainly from my perspective, from the slightly more strategic perspective, absolutely glad [to have been involved]. I think we’ve learnt a huge amount, I think it’s put us in a really strong position to prepare for whatever is to come ahead.

I think when we go to the conferences and meet our colleagues who are absolutely petrified of this voluntary right to buy coming, and I feel a certain calmness in the fact that we have already been through so many of the processes and experiences and we kind of understand what may come and what our potential issues would be when the scheme is rolled out. We’ve been able to test admin, systems, been able to resource it in a way that we can determine what we might need going forward. So I think it has been a good opportunity for us to take part, we have learnt loads and it’s nice to be the lead and have that expertise amongst our peers.

Challenges

While involvement in the pilot was considered worthwhile, it was a challenging process for all the associations because of the tight time schedule and the uncertainty about the progress of the Housing and Planning Bill, which had an impact on the timescale for sales. There were difficulties in predicting demand and limited time to address challenging issues such as exclusions, gaps in information and data, and arrangements for valuation:

12 In the interest of maintaining confidentiality we have not disclosed which housing association the stakeholder quoted worked for.

The timescales were incredibly challenging … we had two months to get from announcement to inviting applications, [and] three months warning of the going live date.

In general pilots had to undertake a lot of learning in a short period of time and that required considerable staff time and resources:

In our experience the demand was higher than expected in terms of the data collection and the data checking, particularly if you’ve got fraud and fraud prevention, I think it’s quite onerous … and actually it does feel like it’s been a lot of hard work.

However, the impact of additional workload varied across the pilots:

I wouldn’t say it’s stretched the service, there’s been some pressures and reprioritisation for some parts of the business in terms of information but I don’t think it’s necessarily stretched in terms of costs when we did our cost calculation, we factored all the timing in and the same for that transactional fee, we were well within that.

Section 106 properties were automatically excluded because of the limited timescale, but pilots had to make quick decisions about whether to exclude other properties and the pilot programme exposed cases of ‘hidden’ legal agreements and covenants that needed investigation and in some cases prevented sales.

For example, we’ve got a whole estate in one area where there’s a restriction that it remains social housing forever, so the whole estate is exempt. In advance we might have possibly known about that and been able to manage those expectations of those tenants as they came in instead of waiting until we got three, four, five of them checked and then realised there was an issue for the whole estate. So that assets and liabilities register stuff which we didn’t put enough of a focus on at the beginning is possibly where I’m focusing more of my time going forward if we’re going to look at this wider for the rollout.

In general some of the additional workload for the pilots was covered by the additional payment for set-up costs for involvement in the pilot and the fee paid on completion of each sale. These costs will not be covered in this way under the main scheme. In addition, these payments did not cover the wider support costs, including investment in information systems, additional fraud protection and answering queries or providing support and reassurance for tenants:

The point was made earlier about some of the more hidden costs probably across the wider organisation, I think that is probably where there is that significant knock on and when we’re not being paid, whether it’s [for] tenancy verification or getting asset management information for cost calculations.

In some cases [tenants] find it a bit daunting or are not really sure and need reassurance.

There was concern about the resource and administration costs for associations in the main scheme, including the need for specialist staff, and it was recognised that

the pilots had benefited from additional specialist input. There was also concern that associations would have to invest in administrative support without ‘knowing the volumes they’re going to be dealing with’.

The additional resources that have to be given to fraud protection indicate some of the more indirect costs of taking on VRTB for housing associations. Clearly there is a risk of fraud, given the large discounts and property prices involved, especially in higher value areas. The pilot associations have therefore had to audit their existing measures to combat fraud. All pilot associations had robust fraud prevention measures in place but L&Q set the lead here through the following range of checks and evidence requirements:

 All applications have to be hand delivered, and applicants are subject to an interview to discuss their application.

 All parties to the purchase must attend the interview and provide ID.

documentation.

 All tenants' signatures are compared to that on the tenancy agreement and any change of name requires proof of formal certificate such as marriage, divorce, deed poll etc.

 Original identification documentation is required for all parties to the purchase.

This includes photographic ID. All official documents are security checked with tools such UV lights for the correct holograms and markings.

 Each party to the purchase to prove written evidence that they live at the property and have done so for at least 12 months, through council tax or voters role confirmation and supported by additional information such as utility bills, bank statements, doctors letter or mobile phone bill. Tenants were not able to 'evidence' length of tenancy by undertaking a statutory declaration.

 There is a declaration on the application form allowing us to contact any parties in connection with assessing the application and confirming their right to buy.

 If the applicant passes the interview stage, the documentation is passed over to a Tenancy Verification Team which undertakes checks with credit and data agencies.

 Any discrepancies that arise prompt a home visit from housing officers to carry out tenancy audits or gather further information.

 Anti-money laundering checks are carried out for cash purchases and declared savings are checked against any benefits being claimed.

All these steps place additional demands on staff time and resources.

Difficulties in managing tenant expectations were compounded in the first few months because the timescale for sales was unclear. Associations were in a ‘race to get people through in the timescale’ but were also wary about raising tenant expectations whilst waiting for Housing and Planning Bill to go through Parliament.

There was some tenant frustration with delays in the process, but it was also felt that tenants understood the need for patience. One stakeholder felt that associations would come under more pressure in the full programme if tenants became concerned about ‘losing their place' in the queue if there were any delays.

Officers from all pilot associations emphasised the need for as much certainty as possible when the main scheme is introduced.¹³ Associations will face considerable challenges in anticipating demand, managing tenant expectations, dealing with complications in the sales process and simply managing the programme. Any uncertainty around funding for sales would make it much more difficult for individual associations to manage the impact of the main scheme.

Relations between the pilots

The sharing of knowledge and expertise across the pilots was felt to be particularly valuable, reflecting a strong shared commitment to joint working. From the outset the relationship between the five pilots was ‘constructive and collaborative’:

Even though we’ve been very collegiate, that’s not to say we haven’t challenged each other. I can think of various things where we’ve had long and challenging discussions … I think we almost adopted a cabinet collective responsibility approach, that’s we’ve got to think we’re all behind this and this is what we run for the pilot, even though the discussion people may have raised various queries or misgivings about things.

There’s not a single decision that has stymied us as a group that we’ve been unable to follow through because it’s just too difficult, and the more people you have in a room the more challenging that becomes … we appointed a single set of solicitors, we’ve got a set of documents we all signed off, a property and individual eligibility grid that we all signed off and an application form that we all signed off, that is a really hard thing to do.

..overall the five seemed like a really good, tight knit bit of a teamwork, divvied up the jobs without anybody really taking a back seat or putting their feet up.

The experience with our peers was a very positive one … it did seem to be a genuinely collaborative endeavour which is certainly not always the case.

For example, there was considerable discussion about exclusions ‘because it impacted on people in different ways, but also that people had different organisation views’ but it was possible to develop ‘a framework everybody could live with’. There was a widespread feeling that all associations ‘pulled their weight’ in order to make the pilot programme work and that had involved considerable contribution to the management of the pilots over and above the processing of tenant interest and sales.

Joint working was helped because ‘there was a lack of ego in the group’ and ‘we weren’t trying to outdo each other’. There were ‘ambivalent feelings about whether we wanted to be the poster boys or girls for voluntary right to buy … none of us wanted to be perceived as the champion that’s selling social housing assets’. It was also important that ‘Chief Executives were on board and driving it and they knew each other’.

13 Many of the detailed arrangements for the main VRTB programme were not known at the time of these stakeholder interviews.

The mix of pilot areas

Inevitably the five pilot areas could not cover the full geographical diversity of England. The main gaps were felt to be the South West and Midlands:

You’ve got the Sovereign markets, the low value northern ones, I think maybe there is a miss of markets in between.

Perhaps something in the North East or the Midlands would have been sensible.

In terms of spread and variation I’d say yes, all you might have gone for is maybe gone into the far north, Carlisle or Newcastle or somewhere like that […]

The other thing is maybe we could have also included somebody from the South West because that’s a different market with the holiday homes and that’s an interesting market as well.

However, it was generally felt that the pilots represented a good sample of local market contexts and circumstances that might impact on the full programme, including a mix of areas in London, areas with a lot of Section 106 properties, specialist housing and rural property:

It has enabled us from that to test a lot of different housing markets and demand for it.

The key thing was to contrast the centre of London with other centres and with Sovereign, Riverside and Saffron in the picture I think we got a good spread.

The main problem about any attempt to increase the diversity of local housing markets to be included in the programme was that stakeholders felt that a larger number of associations would have been difficult to manage and have potentially undermined the coherence of the programme:

I think it we’d had more people round the table in those piloteers meetings we would have quickly got to the stage where it was unmanageable and as it was, at the beginning, before we got involved, it was a lot thrashing around in the first meetings … I think more of us would have made it more difficult.

I think there’s challenge about whether you can deliver a pilot realistically with more than five organisations.

Governance of the pilot programme

All of the pilots were positive about the role of all partners in the pilot programme and the relative operational freedom given to the pilot associations. There was a feeling that the pilot 'belonged to' the associations and that was important in managing relationships with central government:

I think early days there was a little bit of a ownership tussle went on between us, that very soon went away and they’ve been really supportive […] I can’t fault the support we’ve had to be honest. When we said we thought we needed to be better represented on the Sounding Board we were. So generally speaking I’ve got no complaints.

I think the National Housing Federation have been in a really tricky position so I think they’ve been really excellent to work with. I just think the problems we have had are just a product of the way the government made these decisions in the first place. So in other words the decision to not link the pilot to the main scheme, decisions about timescale blah, blah, but no criticisms of Nat Fed at all, I think they’ve behaved really well and they’ve hosted really well, they’ve been very flexible.

With hindsight the pilots would have established closer links between the Operational Working Group and the Marketing and Communications Working Group. These groups were perhaps driven by different objectives: the operational discussions were often driven by shared and more immediate problems and concerns, and that could have been shared more within the communications team:

..if we could do this again I think right from the get go we should have a much stronger link with the Comms, so someone from Comms should come to those Ops meeting and someone from the Ops group should go to the Comms meetings. We connected up ok but not perfect and I think there were certain points where you could see where that juddered a little bit more than it maybe would have done if we’d made the connection at the start.

There was frustration with the limited opportunity for pilots to engage with the Sounding Board for the main scheme. The initial timetable for policy development and the determination of the national scheme was coterminous with the development of the pilot programme, which meant that there was less scope to communicate and digest lessons from the pilots in order to inform fully the national scheme:

If we have the luxury of a bit more time to plan this, we would have kind of set out the policy development for the main scheme in a way where the timetable could be met by the outcomes for the pilot, but we didn’t have that option available.

The Sounding Board initially should have made a much stronger link to what the pilot was doing. I think that was a timetable issue, but I think they were separate because they were trying to set the scheme up as quickly as possible, the pilot was seen as being on a different track. I think the key thing for this exercise, in future I think you should make a pilot link very firmly to the main scheme Sounding Board and the staff groups for the Sounding Board as well.

Overall the process of planning for the main programme was felt to be disconnected from the experience of the pilots, especially in the earlier stages of the pilot, and stakeholders felt they had to ‘work hard' to be represented in Sounding Board discussions, which did not make sufficient use of the knowledge and expertise that had been garnered during the first few months of the pilot scheme. Stakeholders did report, however, that the interaction between the pilot programme and the Sounding Board improved over time. The Sounding Board agreed, for example, for an additional representative from the pilots to sit on the group. A particular issue of contention was whether a 'portal' approach to applications was to be used in the national scheme whereby applications were made and then funding provided as and when it became available, rather than a 'programme' approach to a specified level of activity. Stakeholders from the pilot associations felt that a portal approach would make it much more difficult for associations to manage tenant expectations and plan for future sales:

But there’ll be an incentive to us to drive costs down of admin, which loops back to…debates with DCLG about what the overall approach will be for the final scheme. The more certainty we’ve got which means we can plan, which is why we favour this programme approach, the more cost-efficient the admin will be.

But if every housing association starts off not having a blind clue [about demand]

it’s going to be so difficult, particularly for small organisations.

The overriding feeling from those involved in the pilot is that they had worked well together in the spirit of providing meaningful insights into key aspects of VRTB in different geographical and housing market contexts. That reflected a shared commitment to testing the scheme and drawing out lessons for the main programme.

In the following chapter, we compare these views about the operation of the pilot scheme with tenants' views and experiences of the application process.

5

5. Tenant Experiences of the